Glen Ellyn will provide tax incentive for developers of microbrewery

  • Glen Ellyn trustees have agreed to award a sales tax rebate to developers of a restaurant and microbrewery, shown in this rendering, in the former Schmid store.

    Glen Ellyn trustees have agreed to award a sales tax rebate to developers of a restaurant and microbrewery, shown in this rendering, in the former Schmid store. Courtesy of the Village of Glen Ellyn

  • After 44 years in business, the family-owned Schmid store closed in 2011.

      After 44 years in business, the family-owned Schmid store closed in 2011. Bev Horne | Staff Photographer, September 2016

 
 
Updated 6/14/2017 6:16 AM

Restaurateurs who are planning to open a Glen Ellyn microbrewery this fall in a long-dormant retail space stand to receive a tax incentive from the village.

Glen Ellyn trustees have approved an economic incentive agreement intended to fill a funding gap in the estimated $3.1 million project to acquire and overhaul the former Schmid store downtown.

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Jon With and John Lindstrom are now putting together the menu and starting their search for staffing for Two Hound Red Microbrewery. They also have tapped Kenny Grommon, who previously worked for Two Brothers, as master brewer, With said.

Roughly 80 percent of the craft beer produced in the rear of the building will be served in the restaurant.

"We want to do a small amount of canning and get that out to the local liquor stores, too," With said. "We want to keep it as local as possible. It makes a lot more sense for us to do it that way."

Last November, trustees agreed to provide $30,000 for interior and facade renovations at an aging property that has sat vacant for six years at 486 Pennsylvania Ave. The village would distribute tax increment financing dollars to reimburse developers once that work was complete.

Developers told village officials the project has become more expensive than originally planned and requested additional assistance. In addition to adding infrastructure for the restaurant and brewery, With said they're "gutting" the old store.

                                                                                                                                                                                                                       
 

Trustees unanimously granted the request on Monday. The village will award $15,000 for installing a sprinkler's system. The rebate agreement expires in 10 years -- or until developers get back up to $105,000 in sales tax revenue, whichever occurs first. Wholesale distribution transactions are exempt.

The village would receive a base amount of $15,000 in sales taxes generated by Two Hound Red Microbrewery. The remaining sales tax revenue would be shared, with the village keeping 25 percent and rebating 75 percent to developers over the life of the agreement.

"The onus would be on the developer to do really, really well and a bang-out business to bring in those sales tax dollars in order to reap the benefits at the end," Economic Development Coordinator Meredith Hannah said.

The deal will take effect at the start of January 2018, provided the village has inspected the building improvements and the restaurant is open. With said Tuesday the goal is to open in late fall.

                                                                                                                                                                                                                       
 

With said he expects to meet the $105,000 cap and close out the agreement in five or six years. Developers have projected $1.79 million in annual sales in Two Hound's first year of business.

"The better we do, the quicker this thing happens," With said. "I don't anticipate taking 10 years."

The family-owned Schmid store closed in 2011 after 44 years in downtown Glen Ellyn.

"It's also one of the larger projects that we've had downtown in a while in terms of restoring or remodeling a building that hasn't been touched in a very, very long time," Trustee John Kenwood said.

The board also agreed to create a new liquor license classification to allow for on-site consumption and distribution for a brewery attached to a restaurant. The village will still need to review a license application for Two Hound.

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